This paper summarizes a formal analysis of the macroeconomic impacts of the pandemic in the U.S., China and the rest of the world. Pent-up Demand, generated from the inability to spend during the Closures/Reopenings, is the second most influential factor, significantly offsetting the overall negative impacts.ĬOVID-19 is already having far-ranging economic consequences, and the end is not yet in sight.
These alone would have resulted in a 22.3% to 60.6% decrease in U.S. The major factor affecting the results in all three scenarios is the combination of Mandatory Closures and Partial Reopenings of businesses. impacts are estimated to be higher than those for China and the ROW in percentage terms. GDP losses from COVID-19 would range from $3.2 trillion (14.8%) to $4.8 trillion (23.0%) in a 2-year period for the three scenarios. It traces the broader economic ramifications of individual responses of producers and consumers through supply chains both within and across countries.
We apply a computable general equilibrium (CGE) model, a state-of-the-art economy-wide modeling technique.
The study considers a comprehensive list of causal factors affecting the impacts, including: mandatory closures and the gradual re-opening process decline in workforce due to morbidity, mortality and avoidance behavior increased demand for health care decreased demand for public transportation and leisure activities potential resilience through telework increased demand for communication services and increased pent-up demand. Given the uncertainty regarding the severity and time-path of the infections and related conditions, we examine three scenarios, ranging from a relatively moderate event to a disaster. We present a formal analysis of the macroeconomic impacts of the COVID-19 pandemic in the U.S., China and the rest of the world.
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